Ofgem Call for Cuts to Costs of Prepayment Meters

The regulator for the gas and electricity markets in the UK, Ofgem, has recently carried out some research into the number of energy companies that charge for the installation of prepayment meters. The findings of this research revealed that 40% of providers charged for this service and another 5% charged for the removal of the meters.

Some gas and electricity providers enforce charges of up to £180 to fit out new prepayment customersí homes with the relevant meter. These types of meter work through a system of tokens and credit that requires a balance to be topped up onto the meter before the energy is supplied to the house.

Ofgem has now stated that energy companies have until autumn to remove these charges.

“Ofgem is concerned that charges and costs for using a pre-payment meter fall on those least able to afford them,” said Philip Cullum, of Ofgem.

“That is why we want to remove barriers, deliver greater protections and offer more choice for pre-payment customers to ensure they are able to find the best possible deals.”

The highest charges for installation reached £180, whilst the highest charges for removal could reach up to £160.

The CEO of Citizens Advice, Gillian Guy, stated that:

“Pre-pay energy consumers pay more for a second-rate service. Too many pre-pay customers can also feel locked out of the best deals by unfair charges.”

BBC Radio 5 found out that over 500,000 prepayment meters were forced upon households since 2009. This is made possible because of the ability of the energy providers to obtain court orders that permit them to install meters in the homes of those who have fallen behind on payments.